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Custodian Agreement Securities

In the case of the UCITS, an intermediary should be used to provide legal advice when the sub-custodian is from a third country. This consultation will focus on insolvency, in order to ensure two issues. On the one hand, the way in which the contract is applied in the event of the sub-depository`s insolvency. On the other hand, make sure that CIS accounts are not part of the sub-depository in the event of bankruptcy. This rule protects investors and the manager himself, as it is necessary to formalize the delegation in a written contract. This regulation requires the custodian to check periodic votes and other technical aspects. Like what. B to ensure that financial instruments are properly registered to monitor the location and nature of these assets. The sub-custodian must also make a regular statement of his circumstances so that the custodian can monitor them. These plans apply to alternative investment funds from April 1, 2020. Delegation will be necessary in the event of a situation. If the custodian is not directly involved in the liquidation and registration of the assets in which the fund invests.

This circular defines the obligations of custodians to their sub-depositors. Therefore, the value votes mentioned above must be performed at least once a week. The Spanish regulator CNMV and the royal decree 217/2008 require a sub-guard agreement at the national level. The retention of securities is an additional investment service in accordance with section 141 of the Securities And Exchange Act. In Article 139, investment firms are considered investment firms to provide investment services. So there is a case where a CIS management company is an investment firm. In this case, third-party investment funds are marketed. By doing so, it fulfils the duty of custody by respecting the individual register of participants in this CIS. This will be updated by the CNMV in its MiFID question and answer document in early 2020. In this case, the sub-depository is necessary for a purpose other than the one mentioned above, and not to delegate functions. Its function is to ensure that units are not lost.

Therefore, when the management company that markets third-party funds goes bankrupt, those securities are transferred to a third party. This obligation is prescribed by Article 30 quarter of the Royal Decree 217/2008. An example of subcustodian is Inversis. However, a receiver account for investment funds (IRA, MS, etc.) refers to the plan manager and the think tank, as noted above, who may not necessarily be the same institution that provides deposit services for the investments of the global fund. On the other hand, the UCITS V Directive, 2014/91/EU, also provides that the sub-custodian may use an omnibus account under the above conditions. In addition, it is necessary to verify that these sub-depositors do keep the principals in their possession through regular external audits. It also calls for the assets of the CIS to be separated from those of the sub-depositors in bankruptcy proceedings. UCITS are required to comply with the other measures mentioned above by alternative investment funds.

This delegation is formalized by a contract between the custodian and the sub-custodian. The treaty contains clauses on technical aspects such as the coordination of differences in the evaluation of units. This measure is a consequence of their responsibility in calculating the net inventory value. Under such an agreement, a custodian may be required to report to the Internal Revenue Service all distributions made from accounts or assets they control.


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